Exhibit 10(af)
AGREEMENT
AMONG PRODUCTION RESOURCE GROUP, L.L.C., NCT GROUP INC. AND
DISTRIBUTED MEDIA CORPORATION
The parties agree to liquidate and satisfy the amounts due to Production
Resource Group L.L.C., a Delaware limited liability company ("PRG"), under a
certain Resolution Agreement dated as of January 11, 2001 (the "Resolution
Agreement"), among Distributed Media Corporation, a Delaware corporation (fka
XxxxxxxxxxxXxxxx.xxx) ("DMC"), NCT Group, Inc., a Delaware corporation ("NCT"),
and PRG as follows: NCT acknowledges that the total amount due and owing as of
the date hereof (exclusive of the amount payable under paragraph 2 hereof) is
$1,850,000.
1) No later than May 11, 2001 NCT shall make a payment of $103,040, which will
bring the lease payments for the equipment referred to in the Resolution
Agreement up to date.
2) NCT Audio Products Inc. ("NCT Audio"), a Delaware corporation and a wholly-
owned subsidiary of NCT, is the owner of 2 million ordinary shares of NXT
plc represented by certificates no. 0021993 and 0021994 less certain shares
sold to date. NCT has agreed to cause NCT Audio Products Inc. to liquidate
such shares in an orderly manner. NCT Audio has the right to sell such
shares in a commercially reasonable manner in ordinary brokers'
transactions on the London Stock Exchange. It is NCT's intention to use the
proceeds from the sale of such shares, inter alia, to meet its obligations
hereunder. The shares are not subject to any lien or charge in favor of any
other person other than a first priority lien over all of NCT's assets
favoring the holder of certain convertible notes issued by NCT having an
aggregate principal amount of $4.5 million with interest accruing at 10%
per annum. The notes also include default penalties and interest
provisions. NCT is currently in default on one of the notes in the
principal amount of $500,000.
3) NCT shall make either (i) a payment of $925,000 on May 30, 2001 and a final
payment of $925,000 on June 30, 2001 or (ii) a single payment of $1,700,000
on May 30, 2001 which in either the case of (i) or (ii), will completely
satisfy the outstanding liabilities that currently exist between PRG, DMC
and NCT. If NCT is unable to pay $925,000 on May 30, 2001 as contemplated
by (i), NCT shall pay no less than $462,500 on May 30, 2001, and shall have
a fifteen day cure period to pay the remainder of the $925,000 (which
remainder shall l not exceed $462,500) by no later than June 15, 2001 with
simple interest on the remainder at the annualized rate of 10% from and
including May 30 to but not including the date of payment using a 365
day/year, and shall as provided in (i), make a single final payment of
$925,000 on June 30, 2001. All payments will be made by wire transfer to an
account or account designated by PRG on Exhibit A hereto.
4) Upon receipt of the payment that satisfies all of the outstanding
liabilities as described in paragraph 3 above, PRG on the one hand, and NCT
and DMC on the other, agree to release each other from any and all claims
and obligations arising from any previous agreements and PRG agrees to
assign the title to all Equipment (as hereinafter defined) (or to instruct
Pepe & Hazard, LLP as escrow agent under the Resolution Agreement, to
transfer such title).
5) PRG agrees to ship all the equipment, associated components and spare parts
to DMC (the "Equipment") identified on Exhibit B hereto on an as is basis,
without any representations or warranties with respect thereto, after the
payment(s) of no less than $925,000 referenced in paragraph 3 above is
received. The Equipment will he shipped freight collect unless DMC prepays
freight charges or arranges to pick up the Equipment. PRG agrees to deliver
the original warrant agreement to NCT upon payment in full of the amounts
payable under paragraph 3 hereof. In the event that the warrant certificate
cannot be located, PRG will provide a lost warrant certificate affidavit
and shall indemnify NCT against any loss with respect thereto.
6) Failure to meet any obligation hereunder shall constitute an immediate
material breach which shall, without further action or notice, entitle PRG
to exercise any and all of it rights at law or equity under the Resolution
Agreement, the Note referenced therein and any other agreement between the
parties. Nothing in this agreement shall be construed to in any manner or
to any extent to impair or diminish, waive or release any rights or
remedies PRG or its affiliates have under such agreements, which rights and
remedies shall terminate only upon full performance of this agreement.
Similarly, any defenses that NCT or DMC may have in respect of such
agreements may be asserted, and shall not be deemed impaired, diminished or
waived due to the execution and delivery of, or due to any breach or
default by NCT and DMC under, this agreement. Any rights compromised
hereunder and all such liabilities, claims, obligations and defenses shall
be automatically revived in the event that any payment hereunder is voided
for any reason during or as a result of any insolvency proceeding in which
NCT, DMC or any of their respective affiliates are the debtor.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THIS 11TH DAY
OF MAY, 2001.
NCT Group, Inc.
/s/ XX X. XXXXXXX
By: Xx X. Xxxxxxx
Title: Senior Vice President,
Chief Financial Officer
Distributed Media Corporation
/s/ XXXXXXX X. XXXXXXXX
By: Xxxxxxx X. Xxxxxxxx
Title: Chairman
Production Resource Group L.L.C.
/s/ XXXXX X. XXXXXX
By: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
